Rate Survey: Credit Card Rates Stay at Record Highs

Interest rates on new credit card offers stayed at record highs this week, according to the CreditCards.com Weekly Credit Card Rate Report. The average annual percentage rate (APR) on new card offers remained at 14.94% for the second straight week. That's the highest since we began tracking rates in 2007. The previous record was 14.91%, set in July. The only APR change we saw this week was from Cabela's. The sporting goods retailer changed the top end of the APR range offered for the Cabela's Club Visa from 18.18% to 18.21%. The low end of the range, 9.99%, stayed unchanged. However, since we only use the low end of ranges in our calculations, the move did not affect the national average. Cabela's chief financial officer Kevin Werts said the change was due to an increase in the London Interbank Offered Rate, or Libor, the British equivalent of the U.S. federal funds rate. When Libor moves, the Cabelas cards APR -- and APRs of all other variable rate cards that are tied to it -- moves by the same amount and in the same direction. Most cards in the United States are variable rate cards, like the Cabela's card. However, most cards in the U.S. are tied to prime rate, and the prime rate moves based on changes to the Federal Reserve's federal funds rate, not Libor. In fact, Cabela's card was the only card in the database that was affected by the move.Mostly stable, despite the records

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Though rates are at an all-time high, this year has seen the most stability in rates since we began tracking APRs. The national average has gone up less than a quarter of a percentage point since the first of the year (from 14.71% to 14.94%), and so far in 2011, rates have remained unchanged from week to week 19 times. In 2009 and 2010 combined, the national APR average was unchanged 21 times, and 2008 only saw rates unchanged seven times. Banks and creditors are no longer grappling with implications of the Credit CARD Act of 2009. Now that the regulations have been implemented and the dust has settled, creditors have largely been leaving rates alone. When they have moved, however, they've tended to go up. Rates have moved up 11 times -- including twice in the past three weeks -- and have only decreased six times. Still, despite those increases, a few credit card categories CreditCards.com tracks are still relatively low. Balance transfer, business and low-interest credit card APRs are each lower now than they have been in months. For example, the national average APR for balance transfer cards, at 12.73%, is at its lowest point in two years. The low interest card category is the lowest it's been in 2011, at 10.73%.